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EEOC likely to exercise restraint on litigation

Posted On: Dec. 4, 2017 1:00 AM CST

EEOC likely to exercise restraint on litigation

The U.S. Equal Employment Opportunity Commission, which is likely to soon have a 3-2 Republican majority, is expected to change its processes and policies to reflect a more pro-business stance under the Trump administration, experts say.

This is expected to include EEOC commissioners assuming more control of issues that have been left to its field offices’ discretion and filing less systemic-oriented litigation on behalf of multiple employees.

It is also anticipated to include a revision of its position on matters including LGBTQ rights, say experts, who do not expect these changes to have a major effect on policyholders’ employment practices liability insurance coverage.

One policy on which the agency is not expected to modify its approach, though, is with respect to sexual harassment, which experts describe as a political “hot potato” (see related story).

Janet Dhillon, whom President Trump nominated as EEOC chair, and nominated commission member Daniel M. Gade are expected to be approved by Congress, observers say. President Donald Trump has not yet nominated a general counsel, who will also play an influential role. An EEOC spokeswoman had no comment.

“I generally see a cutback or a reduction on general oversight of the workplace under Title VII and the other federal laws,” said Richard B. Cohen, a partner with FisherBroyles L.L.P. in New York.

“I’m not going to say they’re pro-employer at any point, but I think they’re more receptive at this point to the employers’ position than the EEOC would otherwise be” with a Democratic majority, said Eric B. Meyer, a partner with law firm Dilworth Paxson L.L.P. in Philadelphia.

The EEOC will no longer focus on attempts “to engage in litigation tactics to force certain outcomes or to force policies” as it did under the Obama administration, although “that doesn’t mean, certainly, that the commission won’t continue to vigorously enforce the law,” said J. Randall Coffey, a partner with Fisher Phillips L.L.P. in Kansas City, Missouri.

But there may be fewer cases filed for multiple employees, experts say.

In a report issued in November, the agency said that in fiscal year 2017, it had increased the percentage of systemic cases on its active docket to 24.8%, exceeding its strategic goal of their accounting for 22% to 24% of cases by fiscal year 2018.

“My sense is less systemic cases will be brought,” with more cases filed on behalf of only one or two workers, said Gerald L. Maatman Jr., a partner with Seyfarth Shaw L.L.P. in Chicago.

Along with this, observers expect EEOC commissioners to take more control over litigation from its field offices.

The commissioners and the new general counsel “will exercise greater control” and probably more restraint with respect “to particularly novel or overly aggressive” legal theories, said Frank C. Morris Jr., a member of law firm Epstein Becker Green L.L.P. in Washington.

“They will be more compliance-oriented and less litigious or adversarial with employers,” said Robin E. Shea, a partner with Constangy, Brooks, Smith & Prophete L.L.P. in Winston-Salem, North Carolina. In addition, said Paul C. Evans, a partner with Morgan Lewis & Bockius L.L.P. in Philadelphia, “We will see more outreach to employers for both training and education purposes, as well as trying to resolve the more complex charges before litigation.”

Some change has already become evident, say observers.

“I’ve seen offices of the EEOC across the country going to greater lengths to try to resolve claims, particularly systemic claims,” often involving cases that have gone on for several years, said Mr. Evans.

One particular issue where the EEOC is expected to change its stance is with respect to LGBTQ issues. Many observers point to the recent conflicting amicus briefs submitted to the 2nd U.S. Circuit Court of Appeals in New York in Zarda v. Altitude Express, in which the U.S. Department of Justice said Title VII does not cover sexual orientation, and the EEOC said it does.

The case involved a gay skydiver who sued his former employer alleging he was fired from his job as a skydiving instructor because of his sexual orientation.

“The EEOC has been very aggressive in searching out cases on the cutting edge” of federal statutes, including those involving transgender issues, said Mr. Maatman. “I think when the Republican commissioners take their seats and have a majority, that sort of view of the EEOC will be pulled back,” he said.

The “good news” for employers is that none of the issues involved “would have an impact on EPLI policies or would require an alteration of the coverage,” said Kelly Thoerig, Richmond, Virginia-based U.S. employment practices liability product leader for Marsh L.L.C. “The coverage, by and large, I would say, is already designed to respond to these claims.”

However, Talene Megerian, New Yorkbased national employment practices liability leader in Willis Towers Watson P.L.C.’s FINEX North America practice, said state activism has increased with a pullback in federal regulation.

As a result, “There’s definitely more scrutiny (by insurers) in terms of clients’ policies and procedures, especially if they operate in multiple jurisdictions.”